Offshores Restricted from Participation in Privatizations and Acquisitions of Russian Strategic Companies

On July 1, 2017, the President of Russia signed into law the de-offshorization amendments to Federal Law No. 178-FZ “On Privatization of State and Municipal Assets” of December 21, 2001 and Federal Law No. 57-FZ “On the Order of Accomplishing Foreign Investment in Entities Having Strategic Importance for Procuring State Defence and Security” of April 29, 2008.

The amendments were officially published at www.pravo.gov.ru on the same date and became effective immediately upon publication. The amendments ban offshore companies established in 40 jurisdictions identified by the Ministry of Finance of Russia from purchases of Russian state (or municipality) owned assets in privatization sales and from acquisition of control over Russian strategic companies (or their assets). The alert memorandum linked hereto summarizes the key provisions of the amendments.